Monday, November 28, 2005

Interview With Fotolia´s CEO Thibaud Elziere: "Microstock Sites Can Capture Up To 30% Of The Existing Market"

I discovered the new start-up Fotoliavia a TrackBack of their blog back in April 2005 and, after their six month beta period, was impressed by their concept and thus the difference to other micropayment sites. It´s about time that new and young people are entering the stock photo industry game of "I´ll buy you before you acquire my competitor", together with new ideas and fresh blood.

A game, that is still dominated by 40+ years old grandpas with starting gray hairs. Some of these grandpas were about 26 years old when they started their own businesses. Regarding the traditional media, also still ruled by 40+ years old grandpas, it´s sometimes difficult for these young companies to find the attention they deserve. So I peppered Thibaud with some questions and here are his reponses.

Andy: Thibaud, could you describe your professional background and your experience in the stock photo industry, as well as the experience of your two co-founders, Oleg Tscheltzoff and Patrick Chassany?

Thibaud: I am still young, 26 years and I did an engineering school in France and a management school in Germany. My experience in the stock image industry is more as a buyer than as a photographer. I was in charge of marketing/communication in some start-up web agencies and had to deal with images quite a lot. Oleg is an very advanced amateur photographer, who shots with a Canon Mark II. Moreover our team is composed of two professional photographers (Chad and David) and one famous model (Aiste). Last but not least, we have Patrick who is an online service specialist with demonstrable successes of creating and selling web services.

Andy: What had been the basic idea to found Fotolia? When did the idea of Fotolia hit you? How did you transform your idea into reality and how long did it take?

Thibaud: The idea came as I was doing an internship in the European web hosting company Amen (owned by that time by Oleg and Patrick) in 2001. I was in charge of various things in the marketing department. I realised how expensive images were and that we couldn’t afford them, that’s how I came up with this idea. A few months after finishing my studies, we decided to concretise this idea. The idea behind Fotolia has been to democratise and legalise the use of images while providing an alternative source of revenue for every photographer (or designer!).

Andy: Fotolia went online in 5 countries with 4 languages and customised WebPages as well as localised web logs. According to the german company Blog, Fotolia maintains at least a new foreign office in Germany (Berlin). Besides your NYC headquarter and the regional office in Seattle, does Fotolia also maintain offices in Spain, UK and France?

Thibaud: We have offices in France (Paris), UK (Windsor), Spain (Bilbao), and in Germany. It’s not really offices but teams of people (from two to three) working remotely to keep costs down. They are in charge of PR, Marketing and Site/Community. All is managed online, as we have very good tools of communication and work processes between us, so it works.

Andy: Regarding Fotolia Spain, France, UK and Germany: are these companies’ official subsidiaries of Fotolia US or are you working with e.g. a franchising system? How many employees does Fotolia have at all right now?

Thibaud: Fotolia LLC directly controls everything; local people are agents for Fotolia LLC and market the local version of the Fotolia LLC service. We are considering proposing franchises in a future may be for some countries, but now in the beginning we need to control everything to be sure it grows the right way. There are around 10 people working right now on Fotolia.

Andy: Frankly, with all the efforts described in the last two questions, is Fotolia really still a completely private funded company? Are business angels and VCs engaged?

Thibaud: It is privately funded so far.

Andy: Fotolia is not the first player in the business field of stock photography micropayment sites. Other companies are way longer online.For a photo seller who likes to sell his photos via Fotolia, what’s the main difference to other micropayment sites, like stock.xchng, iStockphoto, Stockxpert, Shutterstock, etc.? Why should he sell his work through Fotolia? What’s the advantage?

Thibaud: To photographers already familiar with the other micro stock sites, I would say that our great features are:

We sell internationally in local languages, so we promote to a wider amount of people. France, Germany, Spain and UK are big markets. We of course also sell in the US.

With our ranking system, in the long term, the best photographers will have an average price of a sale per image closer to 15 USD than to 1 USD, it will enable them to get higher revenues that will enable them to have a real living out of Fotolia, that is not the case with 1 USD per sale from other sites. In that sense we want to be a real alternative to more classical stock agencies and propose a future to our photographers.

Andy: For a photo buyer, what’s the main difference to other micropayment sites? Why should he buy photos at your site? Where are the main advantages for the photo buyers?

Thibaud: Compared to other micropayment sites we have:

The best price guaranteed; no buyer can find the same picture elsewhere for cheaper. We also have a free picture section that can be interesting for buyers.

The fact that we are in local languages and people can pay in local currencies.

Finally, in addition to all the search features, we have our alert system. We are also planning to add at least 1 feature every month to improve search features and help the buyers find the right picture as fast as possible.

Andy: Photographers have started to submit the same images to more than only one micropayment site. The final result might be -- just as partly as in the case of some classical photo portals -- that all micropayment sites are showcasing more or less the same stock photos like their competitors. What does Fotolia do to avoid this?

Thibaud: Fotolia chose to be implanted locally which allows us to have a set of photographers who are not willing to use foreign websites; it guarantees exclusive and original photos.

For now we are happy to have all images, even the ones sold elsewhere, as we are marketing these images in new markets (Germany, France, etc.).

Andy: Can you describe how your image reviewing process is working exactly?

Thibaud: Our editing team of in-house editors does the reviewing process on each photograph or illustration submitted to Fotolia and judge for its commercial potential. Our internal approval process provides a quick feedback within 24 hours.Andy: Can you describe how your ranking system is working? Where are the benefits for the photographers and the photo buyers? Except from using AJAX technology and Digimarc products, is your technology developed in-house or is it bought from a third-party supplier?

Thibaud: Our ranking system is simple and fair. For photographers the more downloads you have, the higher you can set the price of your photos and the higher your commission will be. The main idea is that photographers who sell a lot must be able to earn more money as they are proven to be good photographers!

Our technology is developed in-house except for the colour search function developed by a company specialised in shape and colour recognition.

Andy: Why do you call Fotolia "A Social Marketplace"?

Thibaud: In addition to being a commercial Marketplace, Fotolia is also a collaborative place where people can share, learn and get feedback.

Andy: It´s no secret that a lot of smaller and even mid-sized photo agencies might encounter severe difficulties to survive the next three until five years. The space left between high end stock, supreme subscription stock and specialised agencies serving very special needs on the one hand and micropayment sites on the other side seems to leave less and less space for the classical normal photo agency.What do you estimate, how big is the potential market size in the stock photography industry for micropayment sites like Fotolia? How much market share might micropayment sites gain from traditional stock photo agencies? Will these survive?

Thibaud: We think that we can get share from the traditional stock photo agency but above all we will focus on the not yet targeted market that couldn’t afford photos before (SOHO and individuals for example). We think that microstock sites can capture up to 30 % of the existing market and create a new market that will be as big, if not bigger, than the one that already exists. Only one or two big micro stock sites will survive, I hope we will be one of them.

Andy: Chad Bridwell, your Director of US Operations, stated recently "Fotolia 1.0 will shake up the stock photography industry." Currently we have some subscription services in the market with a very poor image quality sometimes, even from well-known companies. What do you estimate, will photo buyers possibly switch completely to micropayment sites with more fresh imagery?

Thibaud: They will change to micropayment because of size of image bank (the size of traditional image bank will soon be overtaken), because of fresh and original images, because of interactive tools and service (order request, RSS Alert) and because of the cheaper price certainly. But it will take time, and probably both high end and micro priced will always exist and cohabitate since the market will increase.

Andy: Could you unveil some of your plans for future? Are you planning to add other services to Fotolia in the near feature?

Thibaud: We just released the 1.0 version and we are already planning the launch of the 2.0 version in a few months. We will not reveal our precise plans for the next few months but the strategy will stay the same, democratise the legal use of photos.

At the same time, we are still working to improve the current version and to release different feature: new simpler upload process, new search by country feature and even a small game!

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Interview With Fotolia´s CEO Thibaud Elziere: "Microstock Sites Can Capture Up To 30% Of The Existing Market"

I discovered the new start-up Fotoliavia a TrackBack of their blog back in April 2005 and, after their six month beta period, was impressed by their concept and thus the difference to other micropayment sites. It´s about time that new and young people are entering the stock photo industry game of "I´ll buy you before you acquire my competitor", together with new ideas and fresh blood.

A game, that is still dominated by 40+ years old grandpas with starting gray hairs. Some of these grandpas were about 26 years old when they started their own businesses. Regarding the traditional media, also still ruled by 40+ years old grandpas, it´s sometimes difficult for these young companies to find the attention they deserve. So I peppered Thibaud with some questions and here are his reponses.

Andy: Thibaud, could you describe your professional background and your experience in the stock photo industry, as well as the experience of your two co-founders, Oleg Tscheltzoff and Patrick Chassany?

Thibaud: I am still young, 26 years and I did an engineering school in France and a management school in Germany. My experience in the stock image industry is more as a buyer than as a photographer. I was in charge of marketing/communication in some start-up web agencies and had to deal with images quite a lot. Oleg is an very advanced amateur photographer, who shots with a Canon Mark II. Moreover our team is composed of two professional photographers (Chad and David) and one famous model (Aiste). Last but not least, we have Patrick who is an online service specialist with demonstrable successes of creating and selling web services.